The Indian stock market faced another day of sharp declines on January 13, as bearish sentiments tightened their grip for the fourth consecutive session. Weak global cues, a surge in crude oil prices to a three-month high, and reduced expectations of a U.S. rate cut in 2025 contributed to the downward spiral.

At the close of trading, the Sensex plunged 1,048.90 points or 1.36% to settle at 76,330.01. The Nifty also fell significantly, shedding 345.55 points or 1.47% to close at 23,085.95.

Sectoral impact

All sectoral indices ended the session in the red. The realty index was the worst hit, slumping by 6.7%. Other sectors, including oil & gas, power, PSU, metal, and media, recorded losses in the range of 3-4%.

This broad-based sell-off saw investors’ wealth take a major hit. The market capitalization of BSE-listed companies dropped sharply by Rs 12.39 lakh crore, falling to Rs 417.28 lakh crore from Rs 429.67 lakh crore in the previous session.

Key drivers of the decline

Crude oil prices: Crude oil surged to a three-month high, stoking fears of inflationary pressures and higher input costs across industries.

Global market trends: Weak global markets added to investor apprehensions, as global indices reflected a cautious outlook amid economic uncertainties.

Interest rate concerns: Revised expectations that the U.S. Federal Reserve may delay rate cuts in 2025 also weighed on investor sentiment.

Outlook

Market experts suggest that volatility may persist in the near term as global and domestic factors continue to influence investor behavior. A focus on corporate earnings reports and international economic trends will be critical in shaping market movements in the weeks ahead.

With a significant erosion in investor wealth, market participants remain cautious as they navigate the ongoing uncertainties.

India’s foreign ministry summoned Nural Islam, Bangladesh’s Deputy High Commissioner, on Monday to address rising tensions over alleged violations of a bilateral agreement regarding border activities. This move followed Bangladesh’s summoning of Indian High Commissioner Pranay Verma a day earlier over claims that India attempted to construct fences at five disputed locations along their 4,156-kilometre shared border.

Pranay Verma arrived at the Bangladeshi foreign ministry headquarters in Dhaka around 3:00 PM local time and held discussions with Foreign Secretary Jashim Uddin for about 45 minutes. According to the Bangladesh Sangbad Sangstha (BSS) news agency, the meeting focused on border security agreements and cooperative measures to address cross-border crime.

“Both nations have understandings regarding fencing for security purposes, and our border enforcement agencies—BSF and BGB—have been in regular communication. We hope this cooperative approach continues,” Mr. Verma stated following the meeting.

Background on diplomatic tensions

India and Bangladesh have historically shared strong diplomatic ties. However, tensions escalated following political changes in Dhaka. The ouster of former Bangladeshi Prime Minister Sheikh Hasina after a student-led revolution has strained relations. Ms. Hasina, who sought refuge in India after her government fell, now faces extradition requests and legal proceedings in Bangladesh.

Last month, the interim government in Dhaka, led by Muhammad Yunus, officially requested India to extradite Ms. Hasina to face charges of “massacres, killings, and crimes against humanity.” An arrest warrant has already been issued for her, and Bangladesh is seeking an Interpol “red notice” for her and other fugitive allies.

India’s foreign ministry confirmed receiving the extradition request but declined to comment further. While Bangladesh presses for international cooperation, including support from Interpol, India’s decision on the matter remains uncertain.

Broader implications

This recent border dispute and ongoing political complexities highlight the delicate balance in Indo-Bangladeshi relations. Cooperation in areas like border security and criminal activities has traditionally been a cornerstone of their partnership. However, unresolved political and security issues could challenge this relationship in the coming months.

Observers emphasize the importance of maintaining open communication and adhering to bilateral agreements to ensure stability in the region.

Prime Minister Narendra Modi officially inaugurated the Z-Morh tunnel, also known as the Sonamarg tunnel, in Jammu and Kashmir, marking a significant milestone in enhancing connectivity and boosting regional development. The event was attended by prominent dignitaries, including Jammu and Kashmir Chief Minister Omar Abdullah, Union Minister Nitin Gadkari, and Lieutenant Governor Manoj Sinha.

The 6.5-km Z-Morh tunnel, located in the scenic Ganderbal district, is set to provide all-weather access between Srinagar and Sonamarg, a route often rendered impassable during harsh winters. Following the ribbon-cutting ceremony, PM Modi toured the tunnel, inspected its features, and interacted with officials and workers who contributed to its construction under challenging conditions.

Key features and benefits of the Z-Morh tunnel

The Z-Morh tunnel has been constructed at an altitude of 8,650 feet above sea level, at a cost of over Rs 2,700 crore. It is a vital component of the Zojila tunnel project aimed at improving connectivity between Ladakh and the Kashmir Valley. Below are some of its notable features:

1. Enhanced Connectivity: Spanning 6.4 km, the tunnel reduces travel time between Srinagar and Sonamarg from over two hours to just 15 minutes.
2. State-of-the-Art Infrastructure: The bi-directional tunnel features two lanes, a width of 10 meters, and a parallel escape tunnel for emergencies.
3. Advanced Safety Measures: Equipped with ventilation systems, public address systems, and fire signaling technology, the tunnel ensures a secure travel experience.
4. Capacity and Speed: The structure can handle up to 1,000 vehicles per hour, with a maximum speed of 80 km/h.

Impact on economy and tourism

The Z-Morh tunnel is expected to play a transformative role in the region’s economy and tourism. By providing year-round access to Sonamarg, known for its stunning landscapes and the Sindh river, the tunnel is poised to attract a higher influx of tourists. This development will create new opportunities for local businesses and promote the cultural heritage of Jammu and Kashmir.

Future prospects

The Z-Morh tunnel is a part of the ambitious Zojila tunnel project, set for completion by 2028. Together, these initiatives will reduce the distance between Srinagar and Ladakh, significantly improving travel efficiency and ensuring seamless connectivity along National Highway 1.

With its cutting-edge technology and transformative potential, the Z-Morh tunnel stands as a testament to India’s infrastructural progress and commitment to regional development.